Lawmaker Cancels Hearing On Big Corporations’ Tax Deductions Related To Health Reform
House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., canceled a hearing set for next week that would have probed recent announcements by large firms that they are taking millions of dollars in health law-related write-downs, Kaiser Health News reports. The cancellation comes after a weeks-long political standoff was quelled by the findings of a staff report that says the firms acted properly and that executives acknowledge the health bill may also save them money (Weaver, 4/14).
Bloomberg BusinessWeek: "Chief executive officers of AT&T Inc., Verizon Communications Inc., Caterpillar Inc. and Deere & Co. had been called to provide evidence to support the costs the companies plan to book because of the elimination of a tax break. ... Company officials told committee staff that some of the provisions, such as one ending the tax benefit for providing prescription drug coverage for retirees, would be costly, while aspects of the measure may help hold down company costs. ... House Republican leader John Boehner of Ohio said Democrats canceled the hearing to prevent employers from expressing concerns about the law. 'They don't want to give America's employers a forum to tell the public how [President Barack] Obama's new health-care law is already hurting our economy and hampering job creation,' he said in a statement" (Dodge and Armstrong, 4/14).
The Associated Press: But, "the firms now believe the overhaul could ease their costs if implemented properly," . A statement from Waxman Wednesday said "[c]ompanies like AT&T, Verizon, and a range of stakeholder associations are hopeful that the benefits of the new law will outweigh the costs," and wanted more time to determine how the law would affect them (Perrone, 4/14).
Reuters: "At issue is a sweetener added in 2003 by lawmakers to legislation providing a prescription drug benefit to Medicare, the health insurance plan for the elderly. That incentive was a 28 percent subsidy for retiree coverage, plus a tax deduction for the payment, essentially creating a double benefit not usually granted under tax rules." The health law stripped the tax deduction, but didn't affect the subsidy (Dixon, 4/14).
Peoria Journal Star: "We have appreciated the opportunity to provide the committee with background about cost impacts of the new health care law on Caterpillar," executives from that firm, the first to announce the charges, said in a statement, "We will remain involved in the process...'" (Gordon, 4/14).
The Hill: "'Companies like AT&T, Verizon and a range of stakeholder associations are hopeful that the benefits of the new law will outweigh the costs,' the letter said. 'But they cannot quantify the benefits until the law is implemented.' The companies and committee agreed to hold hearings when needed to examine the healthcare law's potential financial effects" (Needham, 4/14).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.